Steve Fletcher, Managing Director of the Automotive Recyclers of Canada, provides his opinion on how exporting end-of-life vehicles has negative impacts on Canada and the world.
For most of human history, we’ve let an attitude of “out of sight, out of mind” inform how we deal with the results of our industry. We’ve made some progress, but in too many ways, this is how we still deal with older, higher-polluting vehicles and those that have been deemed a total loss by an insurer.
These end-of-life vehicles (ELVs) usually wind up being sold at auction. There’s no problem with this when those vehicles stay in Canada. However, many of these vehicles are exported out of the country, often to countries with less stringent environmental laws and less robust consumer protection.
Canada’s stringent total loss reporting requirements mean that the VIN will almost always give you an accurate history of the vehicle. This history will continue to follow the vehicle no matter what happens to it or who it is sold to … as long as it stays in Canada. International buyers can easily wipe that history when the vehicle is exported.
This setup results in at least three negative outcomes, all of them arising from the same practice of sending these vehicles out of the country. The first has primarily local impacts, mostly confined to Canada. To look at the second, we’ll need to expand our scope and look at things from a global perspective. Finally, we’ll examine the third issue and its implications for both Canada and the world.
Price Increases for Insurers and Consumers
In brief, shipping ELVs out of the country reduces buying opportunities for Canadian automotive recyclers. In turn, this means less inventory and/or higher prices for used parts. The impact of this phenomenon affects not just recyclers but motorists and repairers as well.
In addition, tightening the supply of high-quality used parts by shipping these cars out of the country doesn’t just raise prices for the consumers; it also increases the price paid by the insurance industry, and this is a larger part of the equation. A significant percentage of the parts sold by Canada’s automotive recyclers go to collision repair facilities, with automobile insurers typically footing at least part of the bill.
Most of these groups can’t really do much to impact the salvage buying process, but this is not true of the insurance industry. As the primary source of automotive salvage, Canada’s insurers could elect to set up or support salvage auctions limited to Canadian buyers.
As noted above, there are at least three negative outcomes that arise from sending salvage vehicles overseas. Decreasing supplies of used parts is the first. The second is simply that the developed world should not—can not—continue to export its environmental problems!
We Need To Clean Up Our Own Messes
From the environmental perspective, older, higher-polluting vehicles should be taken off the road and recycled in a responsible manner. This means safely draining all the fluids, removing all of the useful parts, and recycling the rest. However, this often doesn’t happen when these vehicles are shipped out of the country. Instead, they simply wind up on the road in a country with less stringent automotive and environmental regulations. In effect, it makes our waste someone else’s problem.
A report from the United Nations highlights the extent of this problem. According to Used Vehicles and the Environment – A Global Overview of Used Light-Duty Vehicles: Flow, Scale and Regulation, the millions of used cars exported from North America, Europe, and Japan are often of poor quality. This contributes significantly to air pollution and makes it more difficult to mount effective defenses against climate change. The report notes that of the 14 million used vehicles exported around the world, about 80 percent “went to low- and middle-income countries, with more than half going to Africa.”
The Netherlands conducted a review of its own used vehicle exports and found that most of them would not be considered roadworthy in that country. They almost certainly wouldn’t be considered roadworthy in Canada either. The same report found that most of the vehicles were in the 16 to 20 year age range, and their emissions reflected that.
Bluntly, if we’re not willing to have these cars on our roads, then we shouldn’t be selling them to international buyers either. Canada’s system of vehicle branding exists to protect consumers, and we have environmental laws in place to protect the public. By allowing these vehicles to leave the country, we are cleaving to the old adage of “out of sight, out of mind” and putting lives at risk as a result.
To be perfectly clear, no one is forcing the people of Nigeria and Gambia to buy these cars. However, it’s likely that the customers aren’t aware of the vehicle’s history and might not be keen to purchase it if they did. There’s a big difference between a quality used vehicle with lots of life in it and a shattered wreck held together with Bondo and hope, but that difference isn’t always apparent to the naked eye.
Leaving aside the very real cost in human life, these vehicles often fail to meet emission standards, and air pollution doesn’t always stay where it’s generated. We can enact all the clean air regulations we want, but we’re just pushing the problem a bit further off when we send these vehicles overseas.
The Future is Electric
So far, we’ve looked at this from the perspective of Canada and the global impacts resulting from exporting ELVs. There’s a third issue at hand, and it’s only going to increase in importance as time goes on.
It would seem that the age of electric vehicles is nearly upon us. GM has vowed to only produce electrics by 2035, and VW has made a similar pledge to produce 70 percent electric vehicles by 2030. Other manufacturers aren’t far behind. Notably, Audi has completely ceased development of internal combustion engine vehicles.
This presents an issue as the batteries in electric vehicles are notoriously difficult to recycle. Canada has the expertise to do this safely, extracting as much material as possible while minimizing the environmental impact. None of this is guaranteed when an electric vehicle becomes salvage and is exported to a country that lacks either the technical know-how or the desire to do the job right. The batteries might be recovered and recycled properly, or they might be dumped into a landfill.
The fact is that we need those critical materials right here in Canada, and we’re going to need an ever-increasing amount of them. This alone means we need to stop exporting them and ensure we have a robust domestic supply.
Canada and its citizens need these materials. We also need a steady supply of high-quality used parts. Finally, we need to stop exporting our environmental problems to other countries.
All three of these challenges can be met by halting the export of total loss and end-of-life vehicles.